On Nov. 1, 2023—with little fanfare—the $44 million bonds securing title to the H. Lee Dennison building were redeemed. And just like that, Suffolk County took back possession of the building from a little known, but highly effective, Suffolk County Judicial Facilities Agency where I serve as the unpaid chairman.
The JFA, a public benefit corporation with an unpaid volunteer board selected by the county executive and legislature, was conceived by former County Executive Robert Gaffney. It was later signed into existence by him in July 1999 following its inception one month prior.
Gaffney wanted to save taxpayers money by refinancing the New York State Dormitory bonds used for the construction of the Suffolk County Cohalan Court Complex in Central Islip. To do so, underpowers granted by state legislation facilitated the JFA in August 1999 to authorize issuance of $131.3 million of revenue bonds to purchase the Cohalan Court Complex from Suffolk County—a $10 million savings to county taxpayers. Then, under County Executive Steve Levy, the JFA Revenue bonds were redeemed, saving residents another $5 million.
In 2008, the JFA coordinated the bidding and construction of the 318,000-square-foot Yaphank Correctional Facility with the Suffolk County Department of Public Works. Designed to house 360 inmates, the $130 million project was the largest public works project in size and scope for the county since the 1970s. Further, it was completed on time, and on budget.
Then in 2013, after the Great Recession left Suffolk County with few options in facing multi-year budget deficits and serious cash flow problems, I alerted the JFA board the concept of using its power to authorize and issue bonds to purchase the H. Lee Dennison building from Suffolk County with a leaseback stipulation.
The JFA board approved moving forward on the idea.
We met with then-Legislator Ed Romaine—now the Suffolk County executive-elect—who liked the idea since the legislature was grappling with the current budget and future financial crisis. Romaine, (who at the time also served as the JFA’s vice-chair) and I met with newly elected Suffolk County Executive Steve Bellone who was in agreement of obtaining as-needed funds, and redeeming the bonds when the economy and cash position of Suffolk County improved.
Later, during summer of 2013, the New York State legislature amended the original law creating the JFA to expand the agency’s power to issue bonds related to the H. Lee Dennison building. Working throughout the summer, the JFA issued $69 million in bonds to purchase the H. Lee Dennison building, just in time to meet the payroll. The sale leaseback strategy worked as Suffolk County—flush with federal pandemic aid and inflation—generated higher sales tax revenues, redeemed the JFA bonds, and the H. Lee Dennison building returned to Suffolk County ownership.
However, after saving Suffolk County taxpayers $15 million on the Cohalan Court Complex financing, enabling the financial efficiency of constructing the new Yaphank jail, and preventing cash-strapped Suffolk County from missing a payroll, the JFA will be dissolved as of Dec. 31, 2023, by the New York State Legislature. Undoubtedly, a decision that will deprive taxpayers of a valuable fiscal resource.
Martin Cantor is director of the Long Island Center for Socio-Economic Policy and former Suffolk County economic development commissioner. He can be reached at [email protected].
Image and article originally from libn.com. Read the original article here.